We have discovered a novel murine mutation which causes open eyes at birth and wavy hair. This phenotype is nearly identical to the waved 1 (wa1) and waved 2 (wa2) mutations. The gene affected in wa1 mice is transforming growth factor alpha (Tgfa), a widely expressed growth factor. Epidermal growth factor receptor (Egfr), the receptor for Tgfa, is mutated in wa2/wa2 mice. We mapped our waved mutation in an intercross and have localized it to proximal mouse Chr. 7. This shows that this mutation is not allelic with either wa1 or wa2, which map to Chr. 6 and 11 respectively, and we have designated it as waved 3 (wa3). The Tgfa/Egfr ligand/receptor pair has been investigated extensively; however, little is known about other genes that participate in the signaling process. Both of these genes are known to be over-expressed in many tumor cells, as well as in the skin disease psoriasis. While wa3 has not been proven to participate in the Tgfa signaling pathway, the phenotype is strikingly similar to wa1 and wa2. Furthermore, a number of studies of the biochemistry and genetics of Tgfa suggest that there are additional genes that function in the Tgfa signaling pathway. We suggest that the wa3 mutation is in such a gene, and propose experiments to test this hypothesis. Even in the case that wa3 is not in the Tgfa signaling pathway, its function is clearly important for normal development. We have been able to make considerable progress with respect to positional cloning of wa3. The wa3 non-recombinant interval has conserved homology with human chromosome 19q13.2, and the human genomic DNA corresponding to this interval has been nearly completely sequenced. Additionally, we have generated a complete mouse BAC contig across the wa3 interval. Analysis of the sequence in the region has already suggested several genes that can be characterized as candidates for the wa3 mutation. The combination of a positional cloning approach with a detailed characterization of the wa3 phenotype should provide insight into understanding genes that control normal skin development.